Michael Wilson, Morgan Stanley chief equity strategist, has been among the most prominent of the bearish prognosticators this past year, and while he still sees rough times ahead, he also offers some hope for the long term.
At base, Wilson says the S&P 500 is likely to sink another 20% before hitting a bottom near 3,100 during 1Q23. The index slipped into a bear market in June of this year, when the Federal Reserve began its aggressive anti-inflationary interest rate hikes, and has been on a volatile ride ever since. Wilson believes that volatility will only increase as we head closer to the end of the current bear.
“You’re going to make a new low some time in the first quarter, and that will be a terrific buying opportunity,” Wilson opined. “Because by the time we get to the end of next year, we’ll be looking at 2024, when the earnings will actually be accelerating again.”
Meanwhile, Wilson’s analyst colleagues at Morgan Stanley have pointed out two stocks that are already in the ‘buy’ zone. These are equities that have been flirting with their own bottom levels lately, but retain Buy ratings from the analysts – and offer solid upside potential going forward. We’ve opened the TipRanks database to see if there’s agreement regarding these names in the wider analyst community. Let’s take a closer look.
L3Harris Technologies, Inc. (LHX)
The first Morgan Stanley pick we’ll look at is L3Harris, a $39 billion defense contractor agency, whose modern incarnation represents the 2019 merger of L3 Technologies and Harris Corporation. L3Harris offers a range of technological solutions for the defense industry, including important contribution in the vital missile warning and defense segment. The company also offers products valuable in command and control, ISR and SIGINT, and electronic warfare. The company saw more than $17.8 billion in revenues last year, and is active in more than 100 countries around the world.
In the most recent reported quarter, 3Q22, L3Harris had a top line revenue total of $4.2 billion, a flat result year-over-year. On the bottom line, the…
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